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Quote Ref: UKIN01

More Company Purchases For Buy To Let Property

Maths showing that more companies are buy to let property
16 August 2019

By UKinsuranceNET In News

In response to the phased withdrawal of mortgage interest tax relief on buy to let mortgages, more and more landlords are acquiring properties through company purchases – so that mortgage interest payments may be set against profits, on which Corporation Tax is paid at a rate of only 19%.

In its story published on the 14th of August, Property Investor Today confirmed the trend towards acquisitions by companies by revealing that at the end of 2018, 44% of landlords indicated that they would be acquiring buy to let property in the name of companies they had formed. That percentage had expanded to 53% of landlords in the first quarter of this year, and it has now grown to an estimated 55% of landlords.

Incorporation as a limited liability company is the favoured route for 71% of all landlords owning 11 or more buy to let properties.

But even among landlords with property portfolios of 10 buy to let dwellings or less, as many as 51% are now saying they are likely to incorporate as a limited company before making any further acquisitions – while only 27% of landlords plan to make such a purchase as a private individual.

The steady trend towards incorporation was a subject we considered back in February of 2017, when some of the benefits of such a restricting in the acquisition and ownership of buy to let property was already becoming apparent. We discussed in some detail both the tax advantages in incorporation and the differences in the way in which mortgage applications are treated for individuals and companies.

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